Understanding how your credit card works is a key factor in using it responsibly. Your credit card works in monthly cycles. The day your cycle ends is your closing date. That's the date your statement is generated and interest is charged. It is also the start of the countdown toward your payment due date.
Determining Your Closing Date
The closing date on your credit card is the last day in its cycle. Every purchase you’ve made from your prior closing date is included in the current cycle. When your credit card hits its closing date, the cycle is closed and your statement is generated. At this point, the current balance is reported to the credit bureaus. Any purchases, cash advances or balance transfers made after the closing date will go into the next cycle.
Reviewing Your Statement
Your statement is mailed out immediately after the closing date. Review this document carefully when it comes to you. Note all transactions made since the previous closing date and make sure they are all legitimate purchases that you’ve made. If there are any discrepancies or unknown purchases, contact your credit card company immediately.
Checking the Due Date
Don’t confuse your statement closing date with your payment due date. While the closing date is the end of your statement cycle, the due date is the date by which you must make your payment to avoid a late charge. Your statement will list both of these dates clearly. If there is any confusion or if you can’t tell exactly when your payment is due, call the number on the back of your credit card. Typically, you will have an option to enter your account number using your phone’s dial pad and a recording will give you your account details, including your due date. It will not, however, list your statement closing date. If it’s not clear, follow the prompts to speak to a card representative who will help you out.
Understanding the Law
Congress passed the Credit Card Accountability Responsibility and Disclosure Act in 2009. This law governs the activity of all credit card companies in the United States. It covers a variety of items, ranging from interest rates to over-the-limit fees. It requires that a credit card company be completely transparent in its dealings with you, the consumer. This is why your closing date should be listed clearly on your monthly statement. The company is also required to notify you in advance of any changes to your credit card account, including your closing date.
